Surprise! Nearly half of IndiGo foreign-owned

Caelum Investments, a little-known US-based firm owns 48% of IndiGo, company information accessed by HT has shown revealing details that were so far unknown about ownership and shareholding structure of India's most profitable airline.

Caelum Investments is owned and run by Rakesh Gangwal, a former CEO of US Airways.

Gangwal and Rahul Bhatia, group managing director of InterGlobe Enterprises, together set up IndiGo in 2006.

"Caelum Investments is owned by Rakesh Gangwal, who is based in Virginia," Aditya Ghosh, president, IndiGo told Hindustan Times.

Since its launch in 2006, the Gurgaon-based carrier has never shared details about its promoters and shareholders.

Caelum, sources said, is a Limited Liability Company registered in Delaware, USA.

"IndiGo's foreign ownership also explains it's less than enthusiastic response to foreign direct investment by foreign airlines," said an aviation expert.

IndiGo has reported profits for the last three years.

Company officials said the carrier clocked profits of R650 crore in 2010-11 and expects to make a profit this fiscal too at a time when other domestic carriers are expected to post combined loss of $2.5 billion (about R12,500 crore).

Experts and IndiGo's peers, however, have contested the airline's profitability claims.

"People like Vijay Mallya have questioned IndiGo's profitability. In a way, you can argue that its profitability is a precursor to an IPO," said Saj Ahmad, a London-based aviation analyst.

"If any airline has a long-term focus on profit and loss it is Singapore Airlines, which a couple of days ago gave its co-pilots the option to take two years' leave without pay because of the downturn," said aviation expert Captain Mohan Ranganathan. "If any airline is claiming to make a profit during this period it is far from the truth."

Ghosh said the carrier does not have any plans for getting listed on the stock exchanges.

"A company is listed to raise more funds. You don't have to be listed to be transparent," Ghosh said. "Our auditors are KPMG and internal auditors are PwC. We file our results with the aviation regulator and the registrar of companies."

"It's no surprise people question their profits and sustainability, particularly since its placed a massive order for 150 A320Neos when it hasn't even finished inducting the 100 A320s ordered in the mid-2000s. With under 40 destinations, one has to wonder why it doesn't have more routes," Ahmad said.